Rollover of Non-cash Required Distribution to Roth for conversion
I have a client that has a stock position that has decreased in value in his IRA (he thinks it will greatly appreciate in the next year). He asked me if we could take a non-cash required distribution to fulfill his RMD this year and then rollover it over into his Roth for the conversion?
We normally take a cash distribution for his RMD each year and then roll it over to his Roth for the conversion.
Permalink Submitted by Alan - IRA critic on Wed, 2017-08-23 15:33
No RMD amount can be rolled over or converted since RMDs are not eligible for rollover. The RMD must be completed first each year, and then additional amounts can be rolled over or converted, whether cash or an in kind distribution. Any RMD that has been rolled over was taxable in the year of the distribution and also results in an excess IRA contribution. If the RMD was converted, then the conversion should be recharacterized and then removed from the TIRA as an excess IRA contribution. The RMD is still considered completed.